FARMINGTON — After more than three decades, Farmington Electric Utility customers will see a rate increase.
Farmington City Council on Tuesday voted 3 to 2 in favor of the increase, with council members Mary Fischer and Jason Sandel casting the opposing votes.
The rate increase will fund infrastructure improvements that are expected to decrease power outages.
Mayor Tommy Roberts said he thinks this will help attract businesses to the area. He said he has recently learned that two of the factors companies look at before locating to a community are utility reliability and rates. An hour outage can have major effects on a business.
However, Fischer expressed concern about the current economy.
"I'm still struggling to see how it makes any sense whatsoever to raise rates in this kind of economic environment," Fischer said, citing the impending fiscal cliff fears.
While Fischer said she agrees there are projects that need to be done, she doesn't think now is the right time. She cited Warren Buffet and other economic analysts as saying that the fiscal cliff has the potential of "being a nuclear bomb to our economy."
City Councilor Dan Darnell addressed Fischer's concerns and assured her the council could reassess the rate increase should "things go to heck in a hand basket."
"We have the authority to pull back on any expenditures," Darnell said.
Mike Sims, the director of Farmington Electric Utility System, defended the proposed increases, saying they were reasonable and long overdue.
"Most utilities go for a rate increase at least every three years," Sims said, adding that the Farmington Electric Utility hasn't seen an increase since 1982.
The electric utility also provided a bar graph comparing the city's utility rates to surrounding communities. The average Farmington utility customer spends just under $50 a month on utilities, according to the graph. With the rate increase, rates will increase by $1 a month every year within a three-year period.
In comparison, according to the graph, residents in Aztec and Durango, Colo., spend around $75 a month.
Sandel's concern increased because of previous years when the budget set aside for the utility system was only partially spent, which left around $61 million in cash reserve, as of Sept. 30.
While $16.9 million of that reserve is restricted, the rest is available to be spent. City Manager Rob Mayes said the remaining $45 million will be used on infrastructure improvement. He said $20 million will be spent this year.
Sims said that in the past, changes in priorities and timing problems left some projects incomplete and some money unspent.
"There are multiple reasons that you can look back and say, 'You should have done that better,'" Sims said. "Maybe we should have."
But Sims said the electric utility has tried to provide reliable service at an affordable rate. He said the infrastructure improvements will help the system move from status-quo to actual improvements.
Councilor Gayla McCulloch asked how often rate increases would happen.
Sims said the company will evaluate rates every three years, although this won't necessarily mean an increase.
McCulloch said she agreed with the current rate increase.
"I think it's obvious we should have done this much earlier than this," she said.